As you may well know, employee stock option is a benefit given by a corporation to their employees. Instead of giving them higher salaries, some corporations opt to provide their employees of the option to buy shares of stock of the company at a certain price within a specified time. There are two kinds of [...]
Stock options have a lot of similarities and differences with stocks. To understand stocks and stock options better, I have prepared a comparison of stocks and stock options. Similarities of Stocks and Options One of the most glaring similarities with stocks and stock options is that they are listed securities. In buying and selling either stocks [...]
In trying to understand stock options, you have to know that there are two kinds of stock options: Calls and puts. Calls and puts are at the opposite end of the stock option spectrum. One involves the right to buy stocks and the other involves the right to sell stocks. In either case both stock [...]
You may have already heard of what stock options are and how they work. May be you are interested in trying out stock options yourself, yet you still have misgivings in risking that much earned money. To further help you in your decision, I enumerated some of the reasons why people try out stock options. [...]
You probably know that there are two ways to earn profits in the stock market: cashing in your dividends or earnings per share (EPS) and earning capital gains by buying and selling stocks. But did you know that you can earn money even if you don’t actually have to buy or sell those stocks? You [...]
Understanding options in the stock market is difficult for any beginner. It involves complex abstractions and a lot of seemingly complicated words. To help you understand stock options more I will discuss and define some of the technical words used in the stock market. Call and Put First of all, an option is the right [...]
The thought of owning, let alone exercising, an employee stock option can be very intimidating to some. Questions of how profitable an employee stock option can be and how much risk it will entail to exercise them often arise. There are some employees who are wondering if they can exercise their employee stock option even [...]
You have probably heard that employee stock options (ESOs) are continuously being used by corporations to retain their employees and to lure in new skilled and intelligent employees. You have also probably learned that an ESO is a kind of call option wherein the corporation writes a contract whereby the employee can exercise his right, [...]
You may be wondering what uncovered calls are and what possible strategies one can employ to profit from uncovered call writing. To be honest writing uncovered calls can hardly be called a strategy as the risks involved are far greater than the profit the writer could possibly make. However, it is not entirely impossible to [...]
Other than earning and hedging in buying calls and puts, investors can also earn profits by selling covered calls. If you sell a call option this means that at the price of the premium you will create an option contract where you are obligated to sell 100 shares of stock if the buyer of the [...]